14 Jul CFPB Reverses Policy Aimed at Mitigating Perpetual Debt
For Immediate Release
July 14, 2020
Contact – Beth Orlansky, Advocacy Director, Mississippi Center for Justice, firstname.lastname@example.org, 769-230-2838
Today, unfortunately, the Consumer Finance Protection Bureau repealed a 2017 regulation that protected Mississippians from some of the most unscrupulous acts of payday lenders, effectively placing borrowers, like sharecroppers, at the mercy of shameless lenders intent on creating endless cycles of debt. For over 10 years, the Mississippi Center for Justice has fought the legalized usury that payday lenders are allowed to extract from thousands of Mississippians whose incomes are often not adequate to meet expenses. These predatory lenders issue loans to people, knowing that they will not be repaid – and these loans are protected by Mississippi law.
MCJ recognizes that many people need small loans to meet extraordinary expenses; however, they do not need short-term loans with crippling fees pushing them deeper into the quagmire of debt. Recognizing the need to provide some protections for borrowers in 2017, the same federal agency revoking the regulation today issued regulations that required lenders to assess a borrower’s ability to repay a loan before the loan could be made.
In light of the CFPB’s policy reversal, the Mississippi Legislature must reform our check-cashing laws by restricting interest on loans to 36% and requiring lenders to assess a borrower’s ability to repay before issuing a loan. Mississippi’s leaders must work to remove people out of cycles of debt instead of allowing predatory lenders free rein to exploit vulnerable Mississippians. Our citizens deserve protection.